Top 5 Best Domestic Stock Mutual Funds

As part of stock mutual fund, investing in domestic stock funds are essential for assets allocation. These domestic stock mutual funds are also known as U.S. stock mutual funds. These best rated domestic stock mutual funds include American Funds Growth Fund of America fund, Vanguard 500 Index Fund, Vanguard Total Stock Market fund, etc.


As we know, there are three types of mutual funds. They are stock mutual fund, bond mutual fund, and balanced fund. Stock mutual funds can be classified into 2 main classes such as domestic stock funds or US stock funds, and international stock funds (including emerging markets). The domestic stock funds invest mainly in US companies.

There are 9 categories of domestic stock mutual funds. The categories are: large growth, large blend, large value, mid-cap growth, mid-cap blend, mid-cap value, small growth, small blend, and small value. These domestic stock funds may specialize in a particular sector of the market such as technology, financials, health care, utilities, communications, natural resources, real estate, and miscellaneous.

Most of these US corporations also have international exposure hence some of these companies sell products internationally such as European market (UK, France, German) or emerging market such as India, China, Brazil, etc. According to CNBC recent article, companies such as McDonald or General Electic have significant international revenue.

Best Domestic Stock Mutual Funds

Choosing the right mutual funds is important for investors. From my research, the most popular domestic equity mutual fund or stock mutual fund is American Funds Growth Fund of America. Also, two of index funds from Vanguard also landed in the top five of this list.
  1. American Funds Growth Fund of America, AGTHX
  2. Vanguard Total Stock Market, VTSMX
  3. Vanguard 500 Index Fund, VFINX
  4. Fidelity Contrafund, FCNTX
  5. American Funds Investment Company of America, AIVSX
1. American Funds Growth Fund of America (AGTHX)

This American Funds Growth Fund of America uses its assets to buy common stocks of best growth U.S. companies. This equity fund is rated with 3 stars by Morningstar. Morningstar Analysts have ranked it with Silver Rating. Its expense ratio is 0.68%. The total net assets are $129 Billion. It also has a sales load of 5.75%

The best domestic stock fund has returned 16.75% over the past 3 year, 0.91% over the past 5 year, and 5.76% over the past decade. This large growth stock mutual fund has a yield of 0.67%. The top 5 stocks in its holding as of April 2012 are: Apple Inc, Inc, Home Depot Inc, Oracle Corporation, and Phillip Morris International Inc.

2. Vanguard Total Stock Market Index (VTSMX)

This Vanguard Total Stock Market Index fund's objective is to track the index performance of MSCI US Broad Market Index. This index mutual fund has been ranked with 4 stars and gold rating. It also has a yield of 1.63%. This large blend fund has 5% annual holdings turnover rate.

This domestic stock mutual fund is open to new investors. The minimum initial investment is $3,000 for regular brokerage account. There is no sales load. The top 3 sectors are: Technology, Industrials, and Financial Services. This best equity fund has year-to-date return of 12.69%.

3. Vanguard 500 Index Fund (VFINX)

This Vanguard 500 Index fund has a dividend yield of 1.75%. Its total net assets are $114 billion. The expense ratio is only 0.17%. The holdings turnover rate is 4%. This large blend fund has no sales load. The fund manager is Michael Buek since 1991.

As of January 2012, the top 5 holdings are: Exxon Mobil Corporation, Apple Inc, International Business Machines Corp, Chevron Corp, and Microsoft Corporation. The top 5 sectors include: Technology, Financial Services, Energy, Consumer Defensive, and Industrials.

updated on 4/30/2012


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